In June, the UK’s Competition and Markets Authority (CMA) initiated an investigation into the proposed $20 billion Adobe and Figma merger. The organization has now released its findings, and they are not optimistic. The investigation aimed to assess whether the merger would diminish competition in the design space, and the results indicate that it would.
It should be noted that these are preliminary findings. However, the CMA’s message is clear. The group asserts that the merger would “eliminate competition between two main competitors,” which is evident given Figma and Adobe’s positions in the industry. The findings also suggest that the deal would “reduce innovation” and stifle the development of competing products. Additionally, it would “eliminate Figma as a threat” to Adobe’s flagship software suites like Photoshop and Illustrator.
Figma holds a significant share of the UK design space, accounting for 80% of the market. It is also a key player in the country’s $19.4 billion app development sector. The CMA suggests that without the merger, Figma would continue to create products that challenge Adobe, which would no longer be the case once the merger is completed.
The investigation concludes that the merger would eliminate competition between these two major players in various fields, including product design, image editing, and illustration. These sectors contribute $60 billion in annual revenue across the UK, accounting for nearly 3% of the national economy and impacting 850,000 skilled workers. The investigation also sought to determine if the merger would harm the UK’s economy, and it is likely that it will.
These are preliminary findings, and the CMA has yet to make a final decision on whether or not to approve the sale. Adobe argues that acquiring Figma would benefit both companies, with the Creative Cloud apps gaining collaborative features from Figma. The company insists it is committed to keeping Figma independent and maintaining its pricing, including the free tier.
If the deal is approved in the UK, Adobe still faces investigations in the US and a warning from the EU. This would be Adobe’s largest-ever purchase in its 41-year history, while Figma emerged in 2012 as a relative newcomer to the market.
